Rep. Krishnamoorthi Makes Case for ‘Seat at the Table’ of Crypto Legislation

Rep. Raja Krishnamoorthi (D, IL), who represents Illinois’ 8th Congressional District – a large part of the northwest suburbs of Chicago, asked on August 30 that key financial regulators and digital asset exchanges turn around by Monday, September 12, what they are doing to prevent fraud in the crypto markets.

Another letter from Congress, another deadline unfulfilled?

What it means

Federal agencies may need to prioritize their responses given the expected delivery of reports pertaining to the President’s Executive Order on blockchain technology and cryptocurrency this coming week. For executives at the exchanges, it could be an opportunity to connect with a pro-blockchain industry congressman. Krishnamoorthi is a member of the bipartisan Congressional Blockchain Caucus.

Also, with fall elections ahead and a potential for House committee chairmanships flipping from Democrat to Republican, this may be an effort by Krishnamoorthi to use his perch as Chair of the Subcommittee on Economic and Consumer Policy while he’s got it.

Last but not least, the timing of the release – the week before Labor Day Weekend – helped amplify coverage during a notoriously slow news week and perhaps reinforced the congressman’s goal of having a “seat at the table” in future distributed ledger technology regulation discussions.

Rep. Krishnamoorthi said in a tweet, “I launched this investigation because, as cryptocurrencies have exploded in reach, popularity and value, so too has the growth in related fraud and consumer abuse as bad actors have sought to prey upon investors.”

The congressman acknowledged private industry’s fraud prevention capabilities, but that more needed to be done including the introduction of insurance for the consumer à la the FDIC

The release also identified a lack of federal efforts to date saying “the federal government has been slow to curb cryptocurrency scams and fraud, and existing federal regulations do not comprehensively or clearly cover digital assets under all circumstances. ”

The letters

There were nine different letters delivered by the Congressmen’s office requesting information including:

The five crypto exchange heavyweights chosen for a report were:

The letters coincided with a separate unrelated notice by the Federal Bureau of Investigation (FBI) regarding decentralized finance (DeFi) and how consumers should be wary of scams in the DeFi space: “The FBI encourages investors who suspect cyber criminals have stolen their DeFi investments to contact the FBI via the Internet Crime Complaint Center or their local FBI field office.”